£100k to invest. Totally lost as to what to do.

jem16

ives31 wrote: »

I've never had a pension before so I figured that at 50 years old, it was too late to start.

You said your employer does have a pension scheme. What kind of pension scheme is it and how much does your employer contribute?

If your employer contributes you should join asap - it's never too late for free money!

As I said, I'm pretty clueless about financial matters.
Where would one go about finding a good IFA?

Unless you have any recommendations from friends or family then use https://www.unbiased.co.uk to search for an adviser in your area.

jamesd

IFAs can be found from unbiased.co.uk . If you just want a suggestion you can do far, far worse than sending poster dunstonh a private message asking for his firm's contact details.

Given your age and the fact that the money will be accessible at age 55, all of it if current proposals become law, the first priority seems likely to be using a pension and investing much or all of your taxable income in the pension, subject to the £40,000 a year cap on how much can get tax relief.

It'll be particularly useful to know whether your work pension scheme uses salary sacrifice or not. That increases the gain for basic rate tax income by also saving the 12% employee NI but it also means that the work pension part cannot be allowed to take your pay below minimum wage.

ISA as fast as possible for the rest, so it can generate tax free income.

Given your experience level and apparent assets you don't seem to be a good candidate for VCT use. So stick to the routine basics of pension and ISA.

See the Should I abandon ISA's discussion for a range of thoughts for a person who was using all cash with no investments. That contains a suggested investment mixture that might be reasonable for you, though that depends heavily on just what sort of drops you'll accept.

A critical thing to know about normal investments is that they work like a rollercoaster in reverse. Upward trend but lots of dips along the way. You need to pick investments so that overall the drop is not more than you can stomach. You do that with the choice of investment types and how much stays in cash savings accounts. Any target can be hit, just a case of working out what it should be. Try not to ask for a drop of less than 20% overall in a bad year because that will seriously reduce your longer term growth potential. being willing to accept 30-40% drop in a bad year is sufficient to get about as much long term gain as you're likely to be able to get.

atush

ives31 wrote: »

Hi.
I'm 50 years old, yes I work. My employer does have a pension scheme. Not sure what tax rate I pay. I don't expect to need the money any time soon. Possibly in 5 years or so but I've got no plans to spend it. Honestly, I don't want to take too many risks but I'm not averse to some limited risk.

So you are 50 been working for some time at a firm with a pension, and you haven't joined it? You are right, you know nothing about finance lol. You have been throwing away free money my friend.

Every 80 you put into a pension is made up to 100 by tax relief. If your employer matches, they put in 100 too. So you get 200 in your pension pot for just 80! Free money. You'd get another 20 back via your tax code if you pay higher rate tax.

So go in on monday and join the pension.

Then no mtg. Does this mean you don't own your own home? If you don't would you like to?

atush

ives31 wrote: »

HI
Thanks for the advice.
I've never had a pension before so I figured that at 50 years old, it was too late to start.
As I said, I'm pretty clueless about financial matters.
Where would one go about finding a good IFA?

It is never too late to start a pension, if your employer contributes with free money.

And never too late, if you dont' want to work forever. Living on the state pension can be hard times.

Let us know what happens when you join the work pension and when you see an IFA.

xylophone

And with regard to state pension, the legislation to implement the single tier arrangements is now in place.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

http://www.ageuk.org.uk/money-matters/pensions/what-the-new-state-pension-reforms-mean-for-you/

ives31

thanks everyone for your advice. I really appreciate it even if i dont understand a lot of it
I should also say that I have been unemployed for most of my life (for various reasons that i won't go into) and hence living on or below the poverty line. The idea of pensions and investments was never a consideration. Getting the next meal was. As you can imagine, no I don't own my own home.
I have worked for the last 10 years and then out of the blue I got this 100k inheritance which I've no idea what to do with.
Thanks again.

robatwork

My advice is to not think of this 100k as on its own that you need to do something with. Look at your whole financial picture knowing you can now take a long term view for the first time.

Consider all your income and outgoings, where and how you are going to live for the next (50?) years, any dependents that you have.

Above all don't go out and splurge it! Make it work for you.

Wammer

If there is anything you don't understand, don't be afraid to ask. Many on here don't appreciate that some people don't have a basic understanding of pensions, savings, etc and use terms and words that are obvious to them and a foreign language to someone like yourself.

At least you have been very wise to come on here and ask for advice rather than go and blow the lot on a new car or something.

I agree with the advice you have been given so far. Take it slowly one step at a time and don't be overwhelmed.

The first thing you should do is see your HR Dept ASAP and see about joining the company pension scheme. Some companies will make contributions in addition to any that you make. Some will match what you contribute so that is free money. There is tax relief on pension contributions of 20% for a basic rate tax payer. That means if you pay in £80, £100 goes into your pension pot. If your company matches then £200 goes in. That is your first priority.

I would also strongly advise that you speak with an independent financial advisor. Not all good IFA are on unbiased.com so personal recommendation would be good if you know someone who uses one

http://www.moneysavingexpert.com/savings/best-financial-advisers

http://www.vouchedfor.co.uk/

bigadaj

I know there are tax benefits in a pension, you need a cash emergency fund, and investments in isas would be good but to me depending on where you are in the country then buying a Property would be a consideration. Gives stability, if you're in council or ha accommodation then less important and I'd look at pensions after cash emergency fund.

RickyC_IFSWP

It sounds like you could benefit from having a proper financial plan (i.e. reviewing all areas of your finances) rather than simply look for investment advice. Given your relative inexperience, as has already been mentioned, a professional could help significantly.